The SEC settles the charges with two ICOs, which opens the door to non-fraudulent cases

Encrypted commercial businesses that fundraise informally through a process known as the Initial Coin Offering, or ICO, are designed for a reshuffle – not just for fraudsters .

In a landmark decision, the Securities and Exchange Commission on Friday charged charges against two ICO transmitters, CarrierEQ Inc., or Airfox and Paragon Coin Inc., for launching unregistered parts offers. This is the first civil sanction applied only for violations of the registration of an offer of securities to the OIC

"We have made it clear that companies that issue securities through ICOs are required to comply with applicable securities registration laws and regulations," said Stephanie Avakian, co-director of the SEC's Enforcement Division. in a press release. "These cases tell people who are considering taking similar steps that we continue to be on the lookout for violations of federal securities laws relating to digital assets."

Since the crypto boom, the SEC has periodically repressed a number of ICO-related companies for fraudulent activities, and a number of financial custodians continue to warn investors of the risks associated with investing in the emerging sector of the crypto. In addition, some studies have concluded that almost half of the ICOs have failed.

Today's decision, however, is the first non-fraudulent case. Under the Securities Exchange Act of 1934, the company could continue its business once the tokens are registered as securities. The SEC added that both companies were required to file for at least one year. "

Both companies agreed to pay a $ 250,000 civil fine and were required to inform investors of their right to a refund. Businesses raised $ 27 million.

In an email to MarketWatch, Airfox said: "As the first company to reach a resolution with the US Securities and Exchange Commission on an initial offer of parts, Airfox plans to continue to develop its blockchain platform in a regulatory. Our team continues to advance in our mission to democratize financial services for the billions of unbanked people in emerging markets. "

Paragon did not immediately respond to a request for comment.

Friday's decision follows the case of 2017 against the Autonomous Decentralized Organization (DAO), a German company that had sold DAO tokens in exchange for Ether. The SEC decided that the sold tokens were securities and therefore constituted a violation of US securities law.

Despite the decision of 2017, many country offices continued to fundraise informally through white papers and social media tools, in the hope of avoiding costly regulatory requirements that traditional tools for capital mobilization involve.

It seems that the SEC is setting the course for the opaque sector of the ICO and that Friday's decisions will be far from the last. Melissa Hodgman, Deputy Director of the Enforcement Division of the SEC, said that each case handled by the IOC and cryptofield was a "message" file.

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Jordan Maglich, a lawyer in law at Wiand Guerra King, said that this case could be the beginning of a broader trend: "I think we will continue to see this type of action, given the considerable number of OIC in recent years. SEC Commissioner Dan Gallagher recently said, "We are seeing the iceberg summit," in terms of enforcement activities, he said.

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